Cash-on-Cash Return (CoC)
Annual cash flow divided by total cash invested — your return on actual dollars deployed.
CoC return measures what your actual invested cash earns you per year. Unlike ROI, which can include appreciation and equity, CoC focuses strictly on cash flow — money in your pocket. It's the #1 metric for evaluating rental properties because it tells you what your money is actually doing for you right now.
CoC Return = (Annual Net Cash Flow / Total Cash Invested) × 100 Annual Net Cash Flow = (Monthly Rent × 12) - Annual Expenses - Annual Debt Service Total Cash Invested = Down payment + Closing costs + Rehab (cash portion)
CoC is the highest-weighted dimension in Kaison's scoring (25%). Target: ≥12% for a perfect 20/20 score. Below 8% scores poorly. Below 0% triggers a hard constraint flag.
You have $15K invested in a BRRRR property. Monthly rent: $1,800. Monthly expenses + mortgage: $1,400. Net monthly cash flow: $400. Annual: $4,800. CoC Return: $4,800 / $15,000 = 32%. This is excellent.
CoC above 12% is strong. Above 20% is exceptional. If a deal shows 40%+ CoC, double-check your numbers — either you found a unicorn or your rent estimate is too high.
Return on Investment (ROI)
Total return (including equity) as a percentage of total investment.
Debt Service Coverage Ratio (DSCR)
Net operating income divided by debt payments — can the property pay its own mortgage?
Net Operating Income (NOI)
Gross income minus operating expenses, BEFORE debt service.
Educational content only. Consult a CPA or attorney for advice specific to your situation.